MOSCOW // A long and bitter battle between Washington and Moscow ended yesterday when Thailand extradited the alleged Russian arms dealer Viktor Bout to the United States to face terrorism charges, whisking him onto a charter flight in a secret operation that caught even his wife by surprise.
The Russian foreign ministry denounced the extradition of the former Soviet military officer, a man many presume to be privy to sensitive secrets, as illegal. It said the extradition was "the result of unprecedented political pressure put on the government and judiciary of Thailand and vowed to "defend the legal rights of V A Bout as a citizen of the Russian federation."
"This whole thing is an example of blatant injustice," said the Russian foreign minister Sergei Lavrov.
The Obama administration is bracing for a Russian backlash, but US officials hope the reset in relations with Moscow can weather the storm. State Department spokesman P.J. Crowley said yesterday that Bout's extradition would likely create "ripples" in ties. But Mr Crowley stressed that the overall US-Russia relationship is mature and any concerns about the Bout case can be "managed."
Mr Bout, 43, was the inspiration for the character played by Nicolas Cage in the 2005 Hollywood movie Lord of War, an amoral "merchant of death" who plied his trade in some of the world's most vicious conflict zones. The real-life man is said to have spent 15 years peddling weapons to African warlords and Islamist militants. He was arrested in a sting operation at a luxury hotel in Bangkok in March 2008.
The operation took months to put in place and was carried out by US Drug Enforcement agents posing as buyers for the Revolutionary Armed Forces of Colombia, or Farc, which the United States regards as a terrorist group. Mr Bout was lured to Thailand allegedly to finalise a purported US$5 million (Dh18m) deal for shoulder-fired missiles.
In the two years since his arrest, Russia has campaigned fiercely to prevent his extradition, presumably because of his wide knowledge of Russian military and intelligence matters.
At times, it seemed Russia might prevail. Mr Bout was at one point freed from his Thai prison. But the US appealed the ruling and, in August, a Thai judge ruled that the extradition should take place by November 20. Thailand beat the deadline by a few days, apparently surprising Russian officials, Mr Bout, his lawyers and his wife, Alla.
"The operation was a secret," she told the Russia Today television after rushing to the prison in vain. Mrs Bout complained that her husband had been shipped off like a piece of air freight, "like a thing," she said.
The Thai cabinet approved the extradition yesterday and, within hours, the man reputed to be the world's biggest arms merchant was on his way.
"I came to the prison but Viktor was no longer there," his wife lamented. "Viktor's term was up and, under the law, he was supposed to be freed because from the legal point of view, we had every ground to win this case."
Mr Bout's lawyers in Bangkok also called the extradition illegal. They said neither they nor Russian diplomats had been allowed to see Mr Bout before he was taken away. Photos show the mustachioed Bout, chained and wearing a bullet-proof vest and a blue track suit, being hustled under heavy guard to a US-bound plane. The operation involved a decoy motorcade and dozens of police commandos in full combat garb.
Mr Bout and the Russian government have never wavered in their insistence that he is an innocent businessman, not an arms dealer. He set up his air cargo business after the Soviet collapse gave rise to all sorts of ambitious ventures in fields once reserved to the state.
His operations were far-flung and he did business in some of the world's hottest hot spots. He reportedly counted the Afghan Taliban among his clients and accepted blood diamonds in payment from some of his African customers. Less colorfully, his company has ferried United Nations peacekeepers from Pakistan to East Timor and worked for US government contractors in Iraq. For a while, a fleet of his cargo planes operated out of Sharjah.
The Russian government's vigorous efforts to prevent Mr Bout's extradition has inspired speculation about what - and whom - he knows. For his part, Mr Bout has consistently denied he knows anything about Russian military or intelligence matters or that he enjoys high-level Kremlin connections.
foreign.desk@thenational.ae
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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